The Division of Taxation is reminding businesses that a tax increase went into effect today on cigarettes and liquid nicotine sold in New Jersey.
The new tax rate, which is expected to raise about $50 million, applies to all New Jersey unaffixed cigarette stamps, and to all stamped cigarettes, liquid nicotine, and container e-liquid in the possession of any distributor, wholesaler, or retailer licensed by the state.
Businesses (distributors, wholesalers, and retailers) were required to complete an inventory of all liquid nicotine, stamped cigarettes and unaffixed excise tax stamps in their possession before selling any of these tobacco products on Aug. 1.
All cigarettes stamped on or after August 1, 2025, must be stamped with either an old stamp that has been inventoried and listed on the Division of Taxation’s Cigarette Floor Tax Return Form or bear a new stamp that proves payment of the increased tax. For liquid nicotine, the floor tax return form can be accessed here.
Both forms must be submitted by Oct. 1, 2025, to the State Division of Revenue and Enterprises, PO Box 250, Trenton, NJ 08646-250.
The tax increase is 30 cents on each cigarette pack, raising the total state tax from $2.70 to $3 a pack. For liquid nicotine (vape pods), the tax increased from 10 cents to 30 cents per milliliter.
The tax increase on cigarettes and liquid nicotine is one of a series of tax increases that were part of the 2026 fiscal year budget enacted by the Legislature and Gov. Phil Murphy this summer and will collectively raise about $600 million. Some of the other tax increases have already taken effect and include:
- Online Casino Gambling Tax. Increased from 15% to 19.75%. (Effective July 1, 2025)
- Internet Sports Wagering Tax. Increased from 13% to 19.75% (Effective July 1, 2025)
- Real Estate Transaction Tax. The fee shifted to seller and doubled to 2% on transactions between $2 million and $2.5 million; shifted to seller and more than doubled to 2.5% on transactions between $2.5 million and $3 million; fee shifted to seller and tripled to 3% on transactions between $3 million and $3.5 million; fee shifted to seller and more than tripled (and more than Governor’s initial proposal) to 3.5% on transactions of $3.5 million and above. (Effective July 10, 2025)
- Newark Hotel Tax. A new hotel surcharge is set at $3 per day. (Effective Aug. 1, 2025)
